Tuesday, 7 July 2020

Octopus Renewables - Update

Last December this new investment trust launched on the UK market via an IPO. It was hoping to raise £250m but actually managed £350m. I applied for some shares via my broker AJ Bell but was unable to obtain my full allocation. I topped up a couple of weeks later so my average price was 103p.

Since the launch the company have exchanged contracts in March to acquire an onshore windfarm in Sweden consisting of 12 turbines with a capacity of 48MW. The project should become operational in the second half of 2021. The cost was €68m.

Also in March ORIT acquired a portfolio of 8 UK solar farms with a combined capacity of 122.8MW for £144m. These began operations between 2013 and 2015 and have an average remaining life of 23 years and all qualify for the governments ROC subsidies. (Full company investment update)

These two purchases account for around 59% of the funds raised at the launch. The board and investment advisers are confident that the remaining funds will be deployed in further acquisitions by the Autumn. They are currently looking at solar and onshore wind in UK, Spain and France as potential targets.

They confirm that a dividend of 3p will be paid out during the first year and the first payment will be made in August (I assume 1.0p) and thereafter quarterly.
2020 YTD

The share price has bounced back nicely post Covid to currently 112p having dipped as low as 92p in mid March. The trust makes up around 4% of my green portfolio.

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!

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